Opinion
DOCKET NO. A-0285-12T2
09-10-2014
NORTHWEST BERGEN COUNTY UTILITIES AUTHORITY, Plaintiff-Respondent, v. KATHLEEN A. DONOVAN, COUNTY EXECUTIVE OF THE COUNTY OF BERGEN, and COUNTY OF BERGEN, Defendants-Appellants, and BERGEN COUNTY BOARD OF CHOSEN FREEHOLDERS, Defendant.
Frank P. Kapusinski, Assistant County Counsel, argued the cause for appellants (James X. Sattely, Bergen County Counsel, attorney; Mr. Kapusinski, of counsel and on the brief). Jeffrey A. Zenn argued the cause for respondent (Sokol, Behot & Fiorenzo, attorneys; Mr. Zenn, of counsel and on the brief; Steven Siegel, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Espinosa, Koblitz, and O'Connor. On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-3073-12. Frank P. Kapusinski, Assistant County Counsel, argued the cause for appellants (James X. Sattely, Bergen County Counsel, attorney; Mr. Kapusinski, of counsel and on the brief). Jeffrey A. Zenn argued the cause for respondent (Sokol, Behot & Fiorenzo, attorneys; Mr. Zenn, of counsel and on the brief; Steven Siegel, on the brief). PER CURIAM
Plaintiff Northwest Bergen County Utilities Authority (Authority) provides sewage treatment services in defendant Bergen County (County). In 1985, the county adopted the county executive plan of government, pursuant to the Optional County Charter Law (Charter Law), N.J.S.A. 40:41A-31 to -41. Defendant Kathleen Donovan (executive) has been the executive of the county since 2010.
In 2011, the executive vetoed that portion of the authority's 2012 proposed budget that provided health care benefits and a stipend of $5,000 to the authority's nine Board of Commissioners (commissioners). When the authority failed to amend its budget to remove the stipend and benefits, the executive summarily terminated seven of the authority's commissioners.
The authority filed a complaint in lieu of prerogative writs seeking, among other things, a ruling that the executive's actions were ultra vires. The trial court granted the authority summary judgment, which the executive and the county appeal. We affirm in part and reverse in part.
I
In 1979 the authority, then known as the Northwest Bergen County Sewer Authority, was reorganized into the Northwest Bergen County Utilities Authority by the county freeholders, pursuant to the Municipal and County Utilities Law (Utilities Law), N.J.S.A. 40:14B-1 to -78. The resolution stated that:
the following persons [shall] be appointed as members of the Bergen County Northwest Utilities Authority at an annual salary of $5,000.00 effective immediately[.]
The resolution specifically named each commissioner and the year his or her term expired; none of the commissioner's terms extended beyond February 1, 1984. Since 1979, the authority's commissioners have been receiving an annual stipend of $5,000; however, no resolution was ever passed after 1979 authorizing a stipend for any of the authority's commissioners other than those specifically named in the 1979 resolution. In or about 2004, the authority commenced providing health care benefits to its commissioners although the freeholders have never passed a resolution authorizing such benefits.
The authority does not have a record of when it first began providing health benefits to the commissioners, but maintains it was likely in 2004.
During a meeting on November 1, 2011, the authority passed a resolution approving its preliminary budget for 2012 and forwarded its budget to the executive for her consideration. Included in the budget was a provision that authorized each of the authority's nine commissioners to receive health care benefits and a $5,000 stipend in 2012. On November 10, 2011, the executive vetoed the minutes of the meeting that approved the stipend and benefits for the commissioners.
The authority sought a review of the veto by the Director of the Division of Local Government Services. On March 19, 2012, the Director determined the veto was valid and binding. During an emergency meeting on March 22, 2012, the authority passed a resolution authorizing the filing of an appeal to the Local Finance Board. The following day, the executive vetoed the minutes of the emergency meeting on the grounds the authority violated various provisions of the Open Public Meetings Act, N.J.S.A. 10:4-6 to -21.
Although the authority took the position it had not violated this Act, the authority addressed the executive's concerns and held another meeting on March 28, 2012. At that time, the authority passed another resolution authorizing an appeal to the Local Finance Board. The executive vetoed the minutes of the meeting that authorized the appeal, as well as those minutes that approved the use of authority funds to prosecute the appeal.
The authority refused to amend its budget and remove the provision that gave the commissioners a stipend and health care benefits for 2012. In response, on April 16, 2012 the executive summarily dismissed seven commissioners. The authority filed the complaint in lieu of prerogative writs seeking, primarily, a ruling that the executive did not have the authority to: terminate the commissioners; veto the meeting minutes that authorized the stipend and benefits for the commissioners; and veto the meeting minutes that authorized the appeal to the Local Finance Board and funding for the appeal.
The trial court agreed with the authority and reinstated the commissioners, and further found the commissioners were entitled to continue receiving the annual stipend and health care benefits. The trial court also ruled the authority had the right to pursue legal action against defendants and use authority funds to finance any lawsuit. While the matter was pending before the trial court, the Local Finance Board reversed the Director of the Division of Local Government Services, finding the Director and the Local Finance Board lost jurisdiction over the matter once the prerogative writs complaint was filed. This ruling has not been appealed.
A
On appeal, defendants claim that, under a provision in the charter law, specifically N.J.S.A. 40:41A-37(c), the executive had the power to terminate the commissioners. We disagree. This statute states, in relevant part, that the county executive:
(b) [w]ith the advice and consent of the [Freeholder] board, shall appoint the county counsel, the administrator, the heads of all departments and any divisions created within such departments, and the members of all county boards, commissions and authorities;
(c) [m]ay, at his discretion, remove or suspend any official in the unclassified service of the county over whose office the county executive has power of appointment.
[Emphasis supplied.]
Subsection (c) does allow a county executive to remove an official in the unclassified service of the county -- and there is no dispute that the authority's commissioners are in the unclassified service -- but an executive also must have the power to appoint an official in order to remove him. Under subsection (b) of the statute, a county executive does not have the power to appoint a commissioner. Subsection (b) requires that both a freeholder board and a county executive, not merely a county executive, appoint a commissioner. As the executive did not have the power to appoint the authority's commissioners, she did not have the power to remove them. See generally Bd. of Chosen Freeholders of the Cnty. of Hudson v. Cnty. Exec. of County of Hudson, 357 N.J. Super. 242, 250 (App. Div.), certif. denied, 177 N.J. 222 (2003).
Further, under N.J.S.A. 40:14B-16, a commissioner is entitled to remain in office until his term expires and his successor is appointed and qualified. Otherwise, a commissioner cannot be removed, except for inefficiency, neglect of duty, or misconduct. Ibid. Moreover, before any removal, a commissioner must receive a copy of the charges against him and be given an opportunity to be heard by the governing body. Ibid. Here, there were no charges leveled against the commissioners and none was given an opportunity to be heard by the governing body.
Under the county executive form of government, both the freeholder board and the county executive constitute the "governing body" of the county. N.J.S.A. 40:41A-32(b).
We are satisfied the executive exceeded the bounds of the authority conferred upon her by statute when she terminated the commissioners.
B
Defendants contend the executive had the power to veto the authority's meeting minutes that approved the stipend and health benefits for the commissioners in the authority's 2012 budget. We agree.
A provision in the charter law, specifically N.J.S.A. 40:41A-37(h), provides that a county executive has the discretion to veto all or part of the minutes of every meeting of a county authority organized under the utilities law. This provision states, in relevant part, that the county executive:
h. [s]hall review and approve or veto, within 10 days of delivery to him, except as otherwise provided herein, all or part of the minutes of every meeting of a county authority organized pursuant to the provisions of . . . [N. J.S.A. 40:14B-1 to -78]. If, within the 10-day period, the county executive returns to the authority and to the board of freeholders the copy of the minutes with a veto of any action taken by the authority or any member thereof at a meeting, together with a written explanation of the reasons for his veto of the action, [the action of the authority] shall be of no effect unless the board of freeholders overrides the veto of the action by a majority vote of its full membership within 10 days of the receipt of the veto action. The county executive may approve all or any part of an action taken at a meeting prior to the expiration of the 10-day period. If the county executive takes no action with respect to the minutes within the 10-day period, the minutes shall be deemed to be approved. . . .
If two-thirds or more of the members of an authority make a determination that an action taken at a meeting is in response to an emergency situation, a copy of the minutes of that meeting shall be delivered to the county executive as soon as practicable following the meeting and the county executive shall have up to 24 hours after the copy of the minutes has been delivered to approve or veto the minutes of
that meeting. If the county executive takes no action with respect to the minutes within the 24-hour period, the minutes shall be deemed approved. If, within the 24-hour period, the county executive returns to the authority and to the board of freeholders the copy of the minutes with a veto of any action taken by the authority or any member thereof at the meeting, together with a written explanation of the reasons for his veto of the action, [the action by the authority] shall be of no effect unless the board of freeholders overrides the veto of the action by a majority vote of its full membership within 48 hours of the receipt of the veto action.
The statute is clear and unambiguous. The Legislature unmistakably gave the executive the power to veto any action taken by a county utility authority organized under N.J.S.A. 40:14B-1 to -78, and placed no limit on the matters that can be vetoed.
The authority relies upon a provision in the utilities law in support of its argument that the executive lacked the power to eliminate the commissioners' compensation. The authority contends N.J.S.A. 40:14B-17 prohibits the reduction or elimination of any compensation a commissioner receives while serving in office. This statute states:
A municipal authority may reimburse its members for necessary expenses incurred in the discharge of their duties. The resolution, ordinance or parallel ordinances for the creation of a municipal authority or for the reorganization of a sewerage authority as a municipal authority may
provide that the members of the municipal authority may receive compensation for their services within an annual and other limitations to be stated in such resolution, ordinance or parallel ordinances, and in that event, each member may receive from the municipal authority such compensation for his services as the municipal authority may determine within the limitations stated in such resolution, ordinance or parallel ordinances. The said provisions or limitations stated in any such resolution, ordinance or parallel ordinances may be amended or added by subsequent resolution, ordinance or parallel ordinances, as the case may be, but no reduction of any such limitation shall be effective as to any member of the municipal authority then in office except upon the written consent of such member. No member of any municipal authority shall receive any compensation for his services except as provided in this section.
The authority argues the resolution passed by the freeholders in 1979 provided an annual stipend of $5,000 to its commissioners indefinitely. The authority also contended that, regardless how a stipend, benefit or other kind of compensation originates, N.J.S.A. 40:14B-17 prohibits the reduction or elimination of such compensation.
First, we do not read the 1979 resolution as authorizing a stipend to the commissioners in perpetuity. The resolution authorized the annual stipend of $5,000 to only those commissioners identified in the resolution, none of whom is still in office. It is undisputed the freeholders never passed a resolution authorizing a stipend to any commissioners other than those set forth in the 1979 resolution. Second, the freeholders never passed any resolution authorizing health care benefits for the commissioners, and N.J.S.A. 40:14B-17 clearly states that no member of any municipal authority shall receive compensation except as provided in this statute. Therefore, in order for those commissioners who were in office at the time of the executive's veto to be eligible for a stipend or health care benefits, a resolution had to have been passed or an ordinance adopted authorizing such compensation.
In response to the trial court's finding that the incumbent commissioners were entitled to continue receiving an annual stipend and health care benefits, on August 1, 2012, the freeholders passed a resolution terminating all stipends and benefits for any commissioners appointed after April 18, 2012. This resolution has not been challenged.
Moreover, when there is a conflict between a provision in the charter law and a general law, the former prevails. See Amato v. Bd. of Chosen Freeholders, 240 N.J. Super. 313, 316-17 (App. Div. 1990); Shapiro v. Essex County Bd. of Chosen Freeholders, 177 N.J. Super. 87, 94 (Law Div. 1980), aff'd, 183 N.J. Super. 24 (App. Div.), aff'd, 91 N.J. 430 (1982). N.J.S.A. 40:41A-25 provides that, when a county operates under one of the optional plans of government set forth in the charter law (and the county executive form of government is one of those plans), the county shall be governed by the plan, the charter law, and all general laws. The charter law defines what constitutes a "general law." N.J.S.A. 40:41A-26, the charter law, defines a general law as one that:
The other plans are the county manager plan, county supervisor plan, and the board president plan. The provisions applicable to all plans are set forth in detail in N.J.S.A. 40:41A-86 to -149.
a. is not inconsistent with this act; and
b. is by its terms applicable to or available to all counties, or;
c. is applicable to all counties or to any category or class of counties, and deals with one or more of the following subjects: the administration of the judicial system, education, elections, health, county public authorities, taxation, and finance, and welfare.
. . . .
A provision in N.J.S.A. 40:14B-17, a general law, prohibits the reduction of a commissioner's compensation. A provision in N.J.S.A. 40:41A-37, a charter law, permits a reduction in compensation, through the exercise of a county executive's veto power. As there is an inconsistency between the subject provision in N.J.S.A. 40:14B-17 and the subject one in N.J.S.A. 40:41A-37, the provision in N.J.S.A. 40:14B-17 is not part of the general law. Therefore, in this case, there can be a reduction or elimination of these commissioners' compensation while they are serving in office.
We reverse the trial court's finding that the commissioners are entitled to receive the stipend and health care benefits that the authority included in its 2012 budget. The commissioners may receive compensation if provided in accordance with N.J.S.A. 40:14B-17, unless vetoed by the executive pursuant to N.J.S.A. 40:41A-37.
C
Defendants appeal the trial court's decision that the authority could appeal the executive's veto of those meeting minutes which approved the appeal of the Local Government Services' Director's decision. In light of our decision that the executive can veto the meeting minutes that approved the stipend and health care benefits for the authority's commissioners, this issue is moot. However, the issue whether the authority can use its funds to pay for the appeal to both the Director and the Local Finance Board persists. The fundamental issue is whether the authority can appeal an executive's veto of its meeting minutes.
Any county powers must be consistent with the New Jersey Constitution. N.J.S.A. 40:41A-30. The New Jersey Constitution states that appeals may be taken as provided by law. N.J. Const. art. V, § 4, ¶ 1(e). N.J.S.A. 52:27BB-15 provides that determinations of the Director of Local Government Services are subject to review by the Local Finance Board. See Rumana v. County of Passaic, 397 N.J. Super. 157, 173 (App. Div. 2007). Accordingly, the authority had a constitutional right to appeal the Director's decision to the Local Finance Board. Although a county executive has extensive veto powers under N.J.S.A. 40:41A-37(h), those powers do not trump those rights afforded under the New Jersey Constitution. N.J.S.A. 40:41A-30. As the authority had a right to appeal the executive's veto of its meeting minutes, it also had a concomitant right to expend funds to finance that appeal.
After carefully considering the record and the briefs, we conclude the parties' remaining arguments are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed in part and reversed in part. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION